CSD  Industry Research Liting Dai Rui Liu Yi Li Yige Xiao
Introduction <ul><li>The CSD industry is the largest beverage industry which includes two key players: Coca Cola & Pepsi. ...
Porter’s Five Forces Analysis
Rivalry <ul><li>High investment leads to high exit barriers </li></ul><ul><li>High industry concentration (two industry gi...
Threat of Substitute <ul><li>Various beverages exist in the market </li></ul><ul><li>Low cost for customers to switch into...
Barriers to Entry <ul><li>Easy to use experience from existing company </li></ul><ul><li>Economies of scale stays steadily...
Supplier Power Entry <ul><li>Simple additives available in open market </li></ul><ul><li>Low cost of ingredient </li></ul>...
Buyer Power <ul><li>Food-stores, fountains, mass merchandisers, vending machines are main selling channels </li></ul><ul><...
Rivalry <ul><li>High exit barriers because of large amount of investment </li></ul><ul><li>2,000 in 1970 reducing to 300 i...
Threat of Substitute <ul><li>Bottling industry including metal cans (60%), plastic bottles(38%), glass bottles(2%). </li><...
Barriers to Entry <ul><li>2,000 in 1970 reducing to 300 in 2000 indicates the low economics of scale </li></ul><ul><li>Bot...
Supplier Power <ul><li>Package and sweetener sellers are main suppliers </li></ul><ul><li>Open market with various provide...
Buyer Power <ul><li>Food-stores, mass merchandisers, vending machines are main selling channels </li></ul><ul><li>Some big...
Recommendation <ul><li>Intensive competition exists in soft-drink industry with monopoly by two beverage magnates </li></u...
Challenge <ul><li>Seesaw battles in US and other countries between two giants </li></ul><ul><li>Low price strategy threate...
Challenge <ul><li>Different industries can sustain different level of profitability; part of this difference is explained ...
References <ul><li>http://www.quickmba.com/strategy/porter.shtml </li></ul><ul><li>DAVI D B . YOFFIE, “Cola Wars Continue:...
Thank  you
Upcoming SlideShare
Loading in …5
×

Sse Cola Wars Group2

1,576 views

Published on

0 Comments
1 Like
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total views
1,576
On SlideShare
0
From Embeds
0
Number of Embeds
57
Actions
Shares
0
Downloads
132
Comments
0
Likes
1
Embeds 0
No embeds

No notes for slide

Sse Cola Wars Group2

  1. 1. CSD Industry Research Liting Dai Rui Liu Yi Li Yige Xiao
  2. 2. Introduction <ul><li>The CSD industry is the largest beverage industry which includes two key players: Coca Cola & Pepsi. </li></ul><ul><li>Coca Cola </li></ul><ul><li>Founded:1886 </li></ul><ul><li>Country of origin : United States </li></ul><ul><li>Sold in over 200 countries now </li></ul><ul><li>Pepsi </li></ul><ul><li>Introduced1898 (as Brad's Drink), 1903 (as Pepsi-Cola),1961 (as Pepsi) </li></ul><ul><li>Country of origin : United States </li></ul>
  3. 3. Porter’s Five Forces Analysis
  4. 4. Rivalry <ul><li>High investment leads to high exit barriers </li></ul><ul><li>High industry concentration (two industry giants with a lot of mediums and laggards) ; fierce competition between competitors </li></ul><ul><li>Industry growth slows down in recent years </li></ul><ul><li>A lot of choices in whole beverage industry </li></ul><ul><li>Most current producers have high brand identity even reputation </li></ul><ul><li>Many different products make it have high diversity between rivals </li></ul>Soft-drink Industry
  5. 5. Threat of Substitute <ul><li>Various beverages exist in the market </li></ul><ul><li>Low cost for customers to switch into any other beverage </li></ul><ul><li>Buyer always has a low inclination to substitute </li></ul><ul><li>More other drinks get popular than CSD </li></ul>Soft-drink Industry
  6. 6. Barriers to Entry <ul><li>Easy to use experience from existing company </li></ul><ul><li>Economies of scale stays steadily and has slightly decrease </li></ul><ul><li>A large amount of investment for entry and commercials </li></ul><ul><li>Difficult for new entrant to find out niche market in saturated market </li></ul>Soft-drink Industry
  7. 7. Supplier Power Entry <ul><li>Simple additives available in open market </li></ul><ul><li>Low cost of ingredient </li></ul><ul><li>Large amount of buying weakens supplier’s bargain power </li></ul>Soft-drink Industry
  8. 8. Buyer Power <ul><li>Food-stores, fountains, mass merchandisers, vending machines are main selling channels </li></ul><ul><li>Some big buyers have bargain power </li></ul><ul><li>Concentrate producer has great freedom to change price </li></ul>Soft-drink Industry
  9. 9. Rivalry <ul><li>High exit barriers because of large amount of investment </li></ul><ul><li>2,000 in 1970 reducing to 300 in 2000 reveals high industry concentration and low industry growth. </li></ul><ul><li>Bottling and canning lines 4-10million for each. </li></ul><ul><li>Minimum cost to build a small bottling plant 25-35 million. </li></ul><ul><li>Low product differences </li></ul><ul><li>High switching costs </li></ul><ul><li>Low brand identity </li></ul><ul><li>Low diversity of rivals </li></ul>Bottling Industry
  10. 10. Threat of Substitute <ul><li>Bottling industry including metal cans (60%), plastic bottles(38%), glass bottles(2%). </li></ul><ul><li>The only substitute, soft package is not the ideal option. </li></ul>Bottling Industry
  11. 11. Barriers to Entry <ul><li>2,000 in 1970 reducing to 300 in 2000 indicates the low economics of scale </li></ul><ul><li>Bottling and canning lines 4-10million for each. </li></ul><ul><li>Minimum cost to build a small bottling plant 25-35 million </li></ul><ul><li>Low brand identity </li></ul><ul><li>High switching costs </li></ul>Bottling Industry
  12. 12. Supplier Power <ul><li>Package and sweetener sellers are main suppliers </li></ul><ul><li>Open market with various providers and low reputation </li></ul><ul><li>Low bargaining power </li></ul>Bottling Industry
  13. 13. Buyer Power <ul><li>Food-stores, mass merchandisers, vending machines are main selling channels </li></ul><ul><li>Some big buyers have bargain power </li></ul><ul><li>Bargaining power depends on different products </li></ul>Bottling Industry
  14. 14. Recommendation <ul><li>Intensive competition exists in soft-drink industry with monopoly by two beverage magnates </li></ul><ul><li>Saturation in bottling industry and low power </li></ul><ul><li>Soft-drink industry have higher profitability compared with bottling industry </li></ul>
  15. 15. Challenge <ul><li>Seesaw battles in US and other countries between two giants </li></ul><ul><li>Low price strategy threatens other competitors to follow, leading to low profitability </li></ul><ul><li>High exposure commercials of two giants and new strategies draw consumers away from other brands </li></ul><ul><li>Two giants going into popular non-carbs makes profit run away from existing producers </li></ul><ul><li>The conquering in new countries makes local beverage market reshuffle </li></ul>
  16. 16. Challenge <ul><li>Different industries can sustain different level of profitability; part of this difference is explained by industry structure. </li></ul><ul><li>Five forces provided a framework help business manager to better understand the industry context in which the firm operates </li></ul><ul><li>http:// www.quickmba.com/strategy/porter.shtml </li></ul>
  17. 17. References <ul><li>http://www.quickmba.com/strategy/porter.shtml </li></ul><ul><li>DAVI D B . YOFFIE, “Cola Wars Continue: Coke and Pepsi in the Twenty-First Century”, Harvard Business School , January, 2004 </li></ul><ul><li>http://en.wikipedia.org/wiki/Coca-Cola </li></ul><ul><li>http://en.wikipedia.org/wiki/Pepsi </li></ul>
  18. 18. Thank you

×